The KHC Way: 10 Principles

March 2019: Last week our global brand building leadership team met in Chicago, as part of our bi-annual offsite cadence. When we first came together, in October 2018, we decided to create the KHC Way to guide our marketers on how to build 200 brands in 50 countries.

First we articulated our brand building mission, to help people make progress in their lives by building brands that are timely in culture. Then we broke down our mission into 10 Principles, that reflect our most fundamental beliefs in terms of brand building. Those principles now serve as a high-level guidance to help KHC marketers make decisions.

Here’s how we articulated those 10 Principles, with some few KHC examples for texture.

“At Kraft Heinz we…”

1.   Build brands with long-standing purposes resonating in culture, beyond just commerce.

For winning brands, well-designed solutions that improve people’s circumstances are critical, but not enough anymore. Consumers are increasingly demanding not only the what’s and the how’s, but also the why’s when they hire products, services or ideas into their lives.

To provide those why’s, our brands must have clear reasons to exist - purposes, causes and even clear “enemies”. They must express those values in a consistent way, manifested not only on branded communications, but also in the real world, sometimes even beyond commerce. Our main inspirations here come from Nike and Apple.

Some KHC examples:

• Kraft: articulated new brand purpose (2019), “to create moments of release so that parenting can be joyful”. Aligned with this purpose, we created the “For the Win Win” campaign, unifying the Kraft portfolio. Beyond communications, we opened the “Kraft Now Pay Later” grocery store in Washington DC during the government shutdown. (agency: Leo Burnett)
• Maxwell House: created new brand purpose (2018), “to defend the glory of hard work”. Aligned with this purpose, we created the all-social “Hands” campaign (DAVID Miami). Beyond communications, we had been offering scholarships to trade schools.
• Planters: articulated new brand purpose (2018), “always there in crunch time”. We launched this purpose with a Super Bowl spot (2019), and then have been doubling down on Mr. Peanut’s unique voice on social/digital. (agency: Vayner)

2.   Win on taste no matter what; evolve towards our Food True North.

For Food, across most categories and consumer segments, taste is by far the main driver of purchase intent. We believe that without an amazing tasting product, nothing else matters. Beyond winning on taste, we have created a “Food True North” to guide our innovation, renovation, and M&A efforts. We’re pivoting our portfolio towards a Clean, Nutritionally-rich and/or Snack-able mix.

Every KHC legacy category in the US now have a True North “translation”, stating which aspects of their product mix must be re-invented or renovated to align with the vision. And the True North became a key filter when we assess M&A opportunities. Our main inspirations here come from Pepsico, Panera and Chipotle.

Some KHC examples:

• Kraft Mac & Cheese: removed artificial flavors, preservatives or dyes (2016). Aligned with this initiative, we ran the world’s largest blind taste test. (agency: CP+B)
• Oscar Mayer Hot Dogs: removed nitrates or nitrites, artificial preservatives and by-products (2018). Aligned with this initiative, we ran the “For the love of hot dogs” campaign. (agency: mcgarrybowen)
• Capri Sun: moved to “all natural” ingredients and no added sugar (2017). Aligned with this initiative, we ran the “Haircut” campaign in 2018. (agency: Leo Burnett)
• Primal Kitchen: acquired in 2019 under our Springboard platform, Primal Kitchen has strong Food True North credentials, besides an inspirational founder (Mark Sisson) who remains at the helm.

3.   Prioritize Household Penetration to combat inevitable churn.

Across our brands, the largest growth potential lies with growing household penetration, by both converting consumers from 0 to 1 purchases per year and by avoiding that existing consumers lapse. The majority of the potential incremental volume lies within light category users, who have low involvement with both food categories and brands. So, our brands need to cast a wide net to remind as many light users as possible, constantly fighting memory decay (and attention fragmentation). Our main inspirations here come from Professor Byron Sharp (How Brands Grow), and the Ehrenberg-Bass Institute for Marketing Science.

Some KHC examples:

• Heinz: created the “At Last” campaign (2018), a simple piece just reminding consumers about Heinz, and the tantalizing anticipation for Heinz Ketchup. (agency: DAVID Miami)
• Bagel Bites: created the fully digital / social “Dad’s Jokes” campaign (2018) activating against lapsed brand fans. (agency: Ferrara)

4.   Uncover pain points to build branded solutions that people hire into their lives.

Consumers hire products and services to do a job. And as they hire something new into their lives, they usually fire whatever was doing the job before, in a less satisfactory way.

This approach forces brand teams to deeply understand consumers’ struggles, even if consumers themselves cannot fully articulate them. It also forces a category agnostic approach, recognizing that people do not consider their potential “hires” the way we manage our categories and brands. Our main inspiration here come from Professor Clay Christensen (Competing Against Luck, co-written with Teddy Hall).

Some KHC examples:

• Just Crack an Egg: a clean and filling breakfast ready in less than 2 minutes, adding an egg for freshness. As I write this, this new brand crossed the $50M sales mark in less than 12 months since launch.
• JELL-O Play: a spin-off toy brand driven by the purpose of “Let’s play with food” (Droga5), to foster child engagement and to fight screen addiction. Aligned with the purpose, we created an animated series (The WOBZ, with Awesomeness/Viacom) to provide parents and kids the opportunity to have conversations related to self-acceptance.

5. Earn attention through explosive ideas that leave room for self-expression.  

It is more important than ever to find ways to earn attention instead of just buying it. This starts with an explosive idea. An idea that has a clear cultural insight or tension that people really want to talk about. The most explosive ideas are often born from something that is already being talked about in culture. Also, they involve a brand acting, not just talking about something. Finally, they allow people to use the idea as an expression of themselves and their personal belief system, with the brand as an indispensable part of the story. Quoting Anselmo Ramos, explosive ideas usually make you laugh or cry.

Our brands must be connected to what’s happening in culture at all times, and become participants in culture - aligned with their stated values (see Principle #1). Our main inspirations here come from Burger King, Anselmo Ramos (GUT), Britt Nolan (Leo Burnett) and David Ogilvy (Confessions of an Advertising Man).

Some KHC examples:

• Country Time Lemonade: created “Legal-Ade” (2018), standing up for children’s rights to run their lemonade stands. (agency: Leo Burnett)
• Heinz: launched “Mad Men / Pass the Heinz” (2017), a meta union of advertising’s real and fictional worlds . We greenlighted the ads (50 years after the fictional pitch), and ran them exactly as Don Draper intended. (agency: DAVID Miami)

6.   Avoid indifference by accepting the risk of rejection.

For KHC brand builders, the ultimate goal is to drive brand love with core consumers. And sometimes to achieve that, brands will put some people off. We believe that the worst place to be as a brand is a place of indifference. So while it would be great for everyone to love everything we do, we are willing to accept this risk of rejection if we believe what we are doing will work with our core consumer. Our main inspirations here come from Patagonia, Starbucks and Adam Morgan (Eat Big Fish).

Some KHC examples:

• DEVOUR: created “Food Porn” (2019), stating that the food is so good that may even become addictive. Then we ran an inverted teaser, launching an extended/”too hot for Super Bowl” video (50M views on YouTube, pre-game), and afterwards we ran a more tamed version during the Big Game (agency: DAVID Miami). As I write this, this new brand crossed the $70M sales mark in less than 24 months since launch.
• Kraft Mac & Cheese: created “Swear like a mother” (2017), a fully digital / social Mother’s Day campaign, to celebrate moms and their glorious imperfections. (agency: CP+B)

7.   Disrupt ourselves by attacking people’s fragmenting needs.

This is an era of increasingly fragmenting needs, with an explosion of “authentic” / start-up food brands. Keeping our focus on our Core brands, we will also aggressively attack emerging consumer needs, as we prefer to cannibalize ourselves than to let others do that on our behalf. Our main inspiration here come from Professor Clay Christensen (The Innovator’s Dilemma).

Some KHC examples:

• Springboard: KHC’s platform to partner with founders and brands disrupting Food & Beverages. Springboard did its first acquisition in 2019 (Primal Kitchen), and now it’s running a second Incubation class for early-stage brands (10 brands incubated so far).
• NUT-rition: a spin-off brand, coming off the Planters’ umbrella. The need for better nutritional value is disrupting almost every category including snack nuts, so we re-launched NUT-rition as a stand-alone trademark, with young women as our design target. (agency: LPK)

8. Continuously read and act upon people’s signals to build a personalized dialogue.

Our brands must communicate the right message to the right person at the right time/context. And do that within a feedback loop that allows our brands to capture consumer signals and get smarter with each and every interaction. Creating this virtuous cycle will allow our brands to be more relevant and build long term value with consumers.

Despite not selling directly to consumers, we can still leverage our multiple touch points and build rich consumer profiles to achieve this vision. Our main inspirations here come from our retail partners who leverage their first party data, and from Vayner (Volume Model).

Some KHC examples:

• Kraft Recipes / My Food and Family: a pioneer platform from a bygone era, now re-imagined and re-branded as “My Food and Family” (2019). The re-tooling will enable a true personalized experience, and also a seamless path to commerce.
• Miracle Whip: created dozens of micro segments within the addressable consumer universe, and started serving context-specific assets to those segments. Reading social signals and actual store sales, we scaled up the most promising content, ultimately doing a large scale stunt by re-naming a town in Florida – from Mayo, FL to Miracle Whip, FL. (2018, agency: Vayner)

9.   Design Brands that are instantly recognizable and irrationally desired.

With so much attention fragmentation, we must design our brands to break through the clutter and create a strong sense of desire. We will be unmistakable in the world and at shelf by building memory structures using our ownable equities and by deploying them with consistency and creativity.

We believe that design is the first and most pervasive impression of our brands, therefore we must design with desire at the heart of every touchpoint. From communications, to packaging design and our product usage experiences. Our main inspiration here come from Martin Lindstrom, Professor Jenni Romaniuk (Building Distinctive Brand Assets) and Professor Daniel Kahneman (Thinking, Fast and Slow).

Some KHC examples:

• Cracker Barrel: our cheese has always been about award-winning craft and quality, but we wanted the brand to connect with consumers on a more emotional level. The new brand seal and signature ribbon invite the consumer into an experience that can only be Cracker Barrel. (2019, agency: Brand Opus).
• Philadelphia: structural (stackable shape) and graphical updates that made the packages more modern and enticing, while at the same time more efficient from a functional perspective. (agency: Davis)
• Oscar Mayer, Planters, Kool-Aid: those brands leverage their distinctive assets on every touch point with consumers. The Weinermobile (Oscar Mayer), Mr. Peanut (Planters), Kool-Aid Man are key devices to cut through the clutter, triggering great emotional responses from consumers.

10. Act fast on decisions that are easily reversed; Be thorough on decisions that aren’t.

For decisions that will have an enduring impact on our brands, we will be thorough and have the right debates supported with data - we want avoid churn and drive consistency. For decisions that only impact the executional and tactical levels we will move very quickly, learn and optimize as we go. Our main inspiration here comes from Amazon.

Some KHC examples of acting fast and learning as we go:

• Heinz: launched “Mayochup” (2018), a new line of condiments born from social conversation. It took 3 hours for the team to figure out the social controversy, and to launch the campaign using 1 single tweet. Then it took 12 weeks for the new Mayochup to be on shelf. (agency: VML)
• Kool-Aid: rapper Lil Jon approached the Kool Aid team to explore “ways to collaborate”. 5 weeks later, a new Christmas hit was launched (2018, agency: mcgarrybowen)
• Kraft: during the US government shutdown (January/February 2019), the Kraft team decided to intervene and go open a grocery store to help federal workers who were not getting paid. Decision happened on a Friday afternoon, and by the following Wednesday the store was up and running. (agency: Leo Burnett)

Our global leadership team came together only 6 months ago, so this is just the beginning of our journey. We cannot say yet that we’re consistently applying those 10 Principles across our 200 brands in 50 countries.

However, progress is happening everywhere at Kraft Heinz. And our teams are very energized to help people make progress in their lives by building brands that are timely in culture.